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China’s budget deficit or the spread between the government’s expenses and revenue, has increased to 5% of its gross domestic product (GDP), according to Jeroen Blokland,  Portfolio Manager for the Robeco Multi-Asset funds, Robeco ONE and Robeco Pension Return Portfolio, tweeted Tuesday.  

With the deficit rising sharply, China has limited room for buttressing the growth rate with fiscal stimulus.  

Therefore, the People’s Bank of China (PBOC), will have to do the heavy lifting in case the trade war continues to escalate, leading to a deeper economic slowdown.